Wondering how you can FINALLY get a handle on your finances? Learning how to create a snapshot of your budget will really help!

Think of a budget snapshot as a quick, one-page overview that tells you exactly where your money stands. It will help you assess if you’re living in the red or the black. It will also help you tighten up any areas where money seems to disappear.

Before you get started on creating your budget snapshot using my free budget template worksheet, follow the steps below to get yourself prepared to budget. Going in prepared with the right mentality and information will help you set a regular budgeting habit.

If you’re ready to finally take control of your money, start by creating a budget snapshot. Here’s how to set yourself up for success.

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8 Steps to Successfully Create a Snapshot of Your Budget

1.      Soul-Search to Shift Your Mindset

Several years (actually, more like decades) ago, I was creating my first simplistic budget, and it was painful. I’m talking painful.

During that time in my early adulthood, my income was low and my expenses were ridiculously high—I repeat, ridiculously  high. Of course, I still wanted to travel, do ALL the things, and buy ALL the “stuff!” I must admit, I was pretty dumb (but most young adults struggle with finances).

Thank God I eventually got my head on straight, but it took some time. Honestly, it took a lot of soul-searching on my part to finally realize what was truly important to me. Truth-be-told, it wasn’t buying all the things. Traveling was a priority—and yes, it still is—but I realized I no longer needed to overspend on all the stuff!

I’m sharing this story because you know the person I used to be; maybe you are like her? We all know someone like this in some regard, even later in life. You see these friends on social media who share all the “wonderfulness” that life has to offer. These people are taking fabulous trips and buying all the trappings of their perceived wealth, only trying to impress people.

It’s important to keep in mind that it’s these same people who are most likely in crisis-mode regarding their personal finances. They may have defaulted on student loans, filed bankruptcy, faced foreclosure, or been sent to collections on more than one occasion.  Yet, all the while, they still stand firmly behind “the mask” of financial affluence.

“There is no truth. There is only perception.” — Gustave Flaubert (1821-1880), French novelist

If this is you, or if it only serves as a cautionary tale, it’s important to realize that changing your financial situation requires a change in your mindset.

If you’re ready to get a handle on your finances and create a realistic budget snapshot, you need to get to the root of your financial situation. Know yourself and what you are willing to change. Prepare to stop hiding behind the mask.

2.      Separate the Like-Tos from the Must-Dos

Creating a budget snapshot is a simple financial process. The real challenge isn’t in writing down your spending (i.e., balancing your checkbook). The problem is in changing your mindset about money.

If you want your budget to stick and you’re ready to commit to making a change, it’s time to get real with yourself (and be honest).

  • If you’re the type who typically sets goals, how do you prioritize them?
  • Do you list your broad, overarching goals annually, and then break them down from there?
  • How do you break goals down?
  • Do you think out each goal and write it down, or wing-it and write them down as they come?

The biggest goal-setting question is this:

  • Do you base the decision of your goals on something you would really “like to” accomplish, or is it because you’re in crisis mode, and it’s a “must-do” at this point?

Your goal-setting philosophy isn’t limited to financial goals. For example, if your goal is losing weight: are you dieting because you’d ‘like to’  or because your doctor tells you it’s a ‘must-do’  because your health is now in crisis?

Another example is, of course, your budget and finances. Would you ‘like’  them to be organized and manageable, where you’re  the one in control? Or, are you potentially facing a bankruptcy where you ‘must’  categorize and pay your expenses in order of priority to avoid filing?

Do you see the differences in what I mean by “like to” versus “must-do”? When it comes to taking the initiative in managing your finances, would you consider yourself in the “like to” or “must-do” stage in your life?

3.      Don’t Tackle it All at Once

Piggybacking off the idea above, if most of your financial goals are “like to” goals, then don’t try to achieve everything at once. Pace yourself. Create a budget snapshot this week. Next week, you may want to look at your retirement, savings, or debt.

I once heard this great saying, and it always stuck with me: “Everything Isn’t Something.”  This means that everything you want to accomplish can’t be your number one priority. Write down the things you want to achieve, listed in the order of importance to you, and tackle them one at a time.

This is a challenging concept to accept sometimes. Especially if you’ve reached the “must-do” point with your finances, you may feel like it’s dire and you need to address it all with significant, sweeping change. But slow and steady is always the better approach for lasting transformation.

It’s a great concept in other areas of your life as well—how you react (or don’t react) to situations that suddenly appear in front of you? How do you handle those situations that you have absolutely no control over?

Sometimes you have to do what you can today, and then move to the next goal tomorrow.

4.      Pick a Goal-Setting Style to Fit

Since goals (especially financial goals) are often highly personal, I’m sure you can imagine just how wildly they can vary. It’s important to pick a goal-setting style that works for you.

What I do when it comes to my own goals is to write down my “BIG 3” annual goals. From there, I break each goal down into smaller parts and mini-steps. If I go off track one week or one month, it’s easy to redirect and get back on my path (much easier than setting a bunch of goals at the beginning of the year and then giving up because I get overwhelmed).

I find using this strategy much easier in keeping a solid grip on my goals, and it forces me to look at my hard numbers each month moving forward, ensuring that I’m on track.

“Knowing yourself is the beginning of all wisdom.” – Aristotle (384-322 BC), ancient Greek philosopher and scientist

5.      Set Aside Time to Assess

If you’re going to create a budget snapshot and measure your financial goals, you need time. Setting financial goals and creating a budget isn’t a one-time project. It’s something you’ll need to revisit regularly.

Again, this is where you know yourself best. If you’re starting, you may want to check in on your financial picture several times a week. As you get in a routine and begin to see your budgeting strategies payoff, you may want to push it out to once a week or every other week.

As you become more financially advanced, you can block out time to assess your investments, take a few minutes each month to evaluate your retirement funds, and move forward with your bigger financial goals. But don’t worry if you aren’t there yet. It will come eventually.

In the meantime, block out a regular time on your schedule to check your bank account against your budget snapshot. How does your money stack up?

6.      Paint a Realistic Picture (Including Emergencies)

In my Free Resource Library, I’ve created a free budget template worksheet to help you plan. The Monthly Financial Snapshot is a quick 1-page worksheet that gives you a bird’s eye view of your monthly bills and savings. Set a monthly financial goal—whether it’s paying most of your bills early or saving a certain amount this month—and track your progress throughout the year.

If you’re ready to get started, you’ll want to download the budget template worksheet. As you’ll see, to create a snapshot of your budget, you list your income and you include your monthly expenses. It’s a straightforward process, but you may start to notice a few insights.

  • What about those little surprises that creep in, creating additional expenses? How will you account for those new added expenses you weren’t quite expecting?! Don’t you just love those?!
  • What about in the event an emergency comes up? Are you prepared financially, so it doesn’t take you off track or side-line your goals?

When an emergency happens that hurts the overall monthly budget, it’s proving that there are zero margins for error in your financial life. No one (no matter how careful) can live a life with zero margins for error. It’s not realistic.

Here’s an interesting statistic that I read about emergency funds:  69% of people struggle to pay for a $1,000 emergency. Could you cover a $1000 emergency?

If you’re an “A-Type” personality like me, and your budget snapshot doesn’t turn out exactly the way you expect, you may be an unhappy camper. The main issue is that life happens; it inevitably affects your finances and throws the numbers off (usually not in a good way).

Your best defense is to plan for emergencies with an emergency fund. Build a cushion into your budget for your peace of mind.

7.      Stay Consistent and Revisit Often

You may think that budgeting is a drag, but honestly? I looove  following a budget (I consider it my little creation of a masterpiece).

There’s something so satisfying about comparing each monthly snapshot with the previous months. The reason I dig this so much is that I know my financial goals at the beginning of the month, and when I check my snapshot at the end of the month, it tells me everything I need to know; numbers don’t lie.

“What it lies in our power to do, it lies in our power not to do.” – Aristotle (384-322 BC), ancient Greek philosopher and scientist

Another statistic that I recently heard was, “7 out of 10 couples DO NOT budget consistently.”

So ask yourself, if you follow a budget, whether you’re flying solo or have a significant other:

  • Do you review your finances regularly?
  • Do you achieve your financial goal(s)?
  • Do you have more discretionary money than you thought you would at the month-end?
  • Were you able to save or invest more than you had initially planned?

As I may  have mentioned previously—I truly geek-out when it comes to all the numbers, as I’m clearly doing now! But seriously, nothing makes me happier when I’m creating a budget snapshot, and my actual numbers turn out better than my approximate numbers each month. I’m telling you, it’s the little things, people!

8.      Look Ahead to the Future

Another budgeting question that remains when you’ve finished your snapshot is: what do you do with the extra money once you’ve paid off an existing liability? 

Extra money! Do you splurge on something? Do you allocate the funds toward another liability?  Do you start investing? Or, do you simply just slip that extra amount into a savings account? (Or do you burn through it without a second thought?)

When you get extra money in your budget, think of it as a gift of opportunity. You can use that money to further your financial goals. Creating a budget snapshot will help you track and identify these mini windfalls.

As with any significant changes you may be considering in your life, if you’re starting to budget from scratch, take the time to find tools to help you formulate your future game plan.

By taking small steps every day, I can just about guarantee that you’ll be living your desired financial results in no time!

If you’re ready to get financially organized or take your finances to the next level, I’m happy to schedule a consultation with you. Click here to learn more about my financial consultation services. Together, we will help you get control of your finances so that they won’t control you!